General Court lays down marker in trademark and design dispute

European Union
In Beifa Group Co Ltd v Office for Harmonization in the Internal Market (OHIM) (Case T-148/08, May 12 2010), the General Court has set out useful guidance for understanding the relationship between registered Community designs and earlier registered trademarks.

In May 2005 Beifa Group Co Ltd applied to register a Community design representing a pen and a lid, which it intended to apply to "instruments for writing". The design was registered in July 2005. At that time, Schwan-Stabilo Schwanhaüßer GmbH & Co KG was already the registered proprietor of a German figurative trademark representing the two-dimensional form of its fluorescent marker pens (also for "instruments for writing" in Class 16 of the Nice Classification).

In March 2006 Stabilo applied for a declaration of invalidity of the Community design under Article 25(1)(e) of the Council Regulation on Community Designs (6/2002), which provides that a Community design may be declared invalid "if a distinctive sign is used in a subsequent design, and Community law or the law of a member state governing that sign confers on the right holder of the sign the right to prohibit such use".

The substantive issues in this case turned on whether Stabilo had a right, under Germany's trademark law (the Markengesetz), to prohibit the use of its earlier figurative mark in Beifa's design. The Markengesetz transposes Articles 5(1)(a) and (b) of the First Trademarks Directive (89/104/EEC) (now the EU Trademarks Directive (2008/95/EC)), and provides that registered trademark rights cannot be exercised against third parties after five years of non-use. Under the Markengesetz, as under the directive, it was for the defendant to raise this issue by requesting proof of use. Therefore, in order to prohibit the use of its sign in Beifa's design, Stabilo had to demonstrate that Beifa's design used, and would infringe, its earlier mark.

Although there are no provisions on proof of use in the regulation, they are evidently relevant to the rights conferred on a right holder by German law and, therefore, Article 25(1)(e). The General Court rejected the argument of Stabilo and OHIM that, in such an instance, the interests of a Community design right registrant are adequately protected by the availability of invalidity proceedings under national law. However, it added that, since proof of use is a "specific preliminary issue", requests for such proof had to be made within the period for observations. The court reiterated that, while a plea which amplifies a closely-related, existing plea can be admissible, no new pleas can be introduced in the course of proceedings. To allow Beifa to raise proof of use for the first time in an appeal would put the Board of Appeal in the "unacceptable position of having to rule on a dispute which is different from the dispute brought before the Cancellation Division".

On the substantive issues, the court found that, although an application for a declaration of invalidity can succeed only if the relevant public will form the impression that the Community design makes use of the distinctive sign relied upon (the first limb of Article 25(1)(e)), there was no basis for Beifa's argument that Article 25(1)(e) applied only where the subsequent design incorporated a sign that was identical to the applicant's earlier registration. In part, the court relied on Recital 31 to the regulation, which expressly preserves the application of trademark law to Community designs. It also noted that there was no reason to require different tests for invalidity and infringement. Accordingly, the use of a similar sign in relation to identical or similar goods or services causing a likelihood of confusion could invalidate a later Community design registration.

The court also addressed various issues regarding its jurisdiction, in particular its power to refer a case back to the Cancellation Division, which OHIM argued would amount to the court issuing an order to OHIM. The court dealt with this quickly. Referring only to Articles 60 and 61 of the regulation, it held that, since it was hearing an appeal from the Board of Appeal (whose decision it had jurisdiction to annul or alter, and which itself has jurisdiction to refer a case back to a lower level with OHIM), it did have the power to refer a case back to a lower level of OHIM (although, in this instance, it decided that such a reference was not necessary).

Finally, the court commented on the scope of questions that it would consider in an appeal. On the one hand, the court declined to consider grounds of invalidity which the Board of Appeal had itself declined to consider. On the other, the court held that, although it must limit its ruling to the parties' heads of claim, it was not confined to considering only those arguments which had been put forward by the parties. If it was so confined, "it might be forced to base its decision on erroneous legal considerations". In this case, the court raised its own (fatal) objection to the Cancellation Division's declaration of invalidity when it realized that that declaration had been made on the basis of a comparison between the design and a separate three-dimensional mark belonging to Stabilo. Although this other mark was similar to both the design and Stabilo's earlier mark, it was not the mark relied upon: three-dimensional marks are "not necessarily" perceived in the same way as figurative marks and, accordingly, the contested decision had to be annulled.

Gareth Dickson, Ashurst LLP, London

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